The Following Is Summary of Information Presented on the Financial

question 99

Multiple Choice

The following is summary of information presented on the financial statements of a company on December 31,2015. What would a horizontal analysis report show with respect to net income?

• A)net income is 45.45% of net sales revenue
• B)a $25,000 increase in net income
• C)a 45.45% increase in net income
• D)a 103.125% increase in net income

---

Definitions:

Price Level Stability

A situation in an economy when overall price levels remain largely constant over time, with minimal inflation or deflation.

Phillips Curve Tradeoff

An economic theory suggesting an inverse relationship between the rate of inflation and the rate of unemployment, indicating that reducing inflation may lead to higher unemployment rates.

Fixed Incomes

Financial investments that provide returns in the form of fixed periodic payments and the eventual return of principal at maturity.

Nominal Interest Rate

The real interest rate plus the inflation rate.